Market Insights - Team Kath|Kare 11
Updated: Jun 5, 2018
By: Dan Nelson
Karla Hult - Kare 11
Published: 5:32 PM CDT April 25, 2018
Updated: 6:22 PM CDT April 25, 2018
It's a sellers' market for homes in highest demand
Millennials are now poised to enter the house market; Generation Xers are still comfortable with their pre-bust home purchase; and Baby Boomers are looking to downsize.
MINNEAPOLIS – Home buyers beware: Twin Cities real estate experts say it’s a sellers’ market this spring for a key part of the market.
And that means realtors themselves are finding they’re selling patience along with property.
“Helping people understand this is going to be stressful. It’s going to be exciting. It’s going to put your emotions through the wringer, but that’s what I’m here for. I negotiate the contract. I make sure everything goes smoothly,” said Dan Nelson with Team Kath at Edina Realty.
Experts say the current crunch is due to different demographic demands: Millennials are now poised to enter the house market; Generation Xers are still comfortable with their pre-bust home purchase; and Baby Boomers are looking to downsize. Add to that, hedge fund buyers who swooped in during the market’s bust last decade, and you have the current market situation.
“Especially that ‘250 price range,’ they’re having a real difficult time finding something,” said Chris Galler, Chief Executive Officer at the Minnesota Association of Realtors.
Galler noted the demand is so high right now, sellers find themselves choosing from multiple offers.
“Meaning two, three, five," he said. "I heard one property, 34 offers."
But Galler also warned that sellers should not expect to overcharge for their property, nor should buyers overspend for the house of their dreams. The selling price remains subject to the bank’s appraisal.
“The bank who is going to lend the money is going to say, ‘No, we’re only willing to lend up to this amount.’ So they want to be sure to get buyers that have a good cash position, have good jobs and don’t get greedy. Because otherwise, it’s going to just come back and bite you later on. And it’s much easier to just say ‘no’ now, then it is to get three months down the road, or a month and a half down the road and the transaction fall apart. Then the property comes back on the market and people start to wonder why it didn’t close,” explained Galler.
Meanwhile, those in the market for a higher-end home don’t have to deal with quite the crunch of other tiers. But that doesn’t lessen the challenge for those looking to buy a house between $225,000 to $350,000.
“You’re getting into multiple offers, sometimes 10, 15, 20 offers, which makes it very competitive,” Nelson said, adding that he still encourages buyers to act now, given the expected interest rate hikes this year.
But that purchase, Nelson says, will require some factual and emotional support.
“I know when they’re going to get upset. I know when they’re going to get excited, so helping them. Again, set the expectation, making sure people understand what’s going to happen, when and how.”
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